Following the acquisition stage of a new
parcel of land and the decision to develop a new housing scheme, the developer
needs to select a procurement method based on market research and funding
capabilities, by keeping in mind the lowest risk and lowest cost.
When selecting procurement, one must
consider various criteria so as to ensure that the employer/developer chooses
the best possible method applicable to the development at hand.
Generally, there are three types of
procurement methods which include:
& Build and
The selection would therefore by based on
the various advantages and disadvantages of each.
Since the developer in question relies
heavily on time frames and consistency of branding, having a set brief with
detailed specifications, one must understand that quality and time are
essential to the project’s execution.
In general contracting, a selected
contractor would be responsible for managing and building the development as
specified by the employer, and in which, they are responsible for
subcontractors, time of delivery and quality. In such cases the employer would
only have one point of reference in the general contractor however there will not
be any direct control on subcontractors and the resulting works. This in turn,
may lead to prolonged timeframes in the eventuality of unsatisfactory quality
of work even though the general contractor is solely responsible. Furthermore,
a general contractor may lack the same motivation or level of commitment of
In design and build procurement,
specifications may unwittingly be left too open to interpretation and this may
be exploited by the contractor by proposing and supplying low grade products
which are at the minimum of established requirements. In case of established
company branding standards, this is would not be acceptable. Consequently a
developer may also pay more when compared to other methods due to a higher
level of risk which has been allocated onto the contractor. This however is
concealed in the cost certainty of the project, whereby a pre-established lump
sum is paid for the contract.
On the other hand, construction management
may be the most viable route of procurement for the project in question. The
developer’s greatest risk in this method is price certainty. Although this is
not available at an early stage since design and construction elements are
provided sequentially, this route carries more advantages to the project’s
scope and requirements. In construction management the developer may appoint a
project manager (in case of large projects) to co-ordinate the different phases
of the project. Such a procurement method may be similar to general contracting
in some instances however in this case, the developer’s one point of reference
is its own representative which means that the company’s branding
specifications are still within reach and control. The developer, through the
project manager, is involved in all stages. Through this method of procurement
the design and construction of the project are also kept apart allowing for
better quality design and execution. With regards to the complexity of such a
project, this can be overseen and better control of work would be obtainable. Finally,
a construction management procurement method would allow for faster timeframes
and adherence to established dates WHY???.
In view of the above, WHICH??
* * *
In tendering, the developer and the
contractor require an agreement based on offer and acceptance whereby the
contractor submits an offer for the specifications and design of the
developer’s requirements and the developer then decides to accept.
There tendering is a process in which an
employer invites contractors to submit offers.
Documents will therefore describe what is
required and outline certain specific instructions. The developer may in such
cases opt for open tendering process in which one would place an advert to
notify all interested contactors to apply. This process is traditionally used
in the public sector and in such cases the developer would possibly receive a
very long list of offer which require resources to asses and verify.
However due to other important factors of
complexity of the project in question and the company’s branding, a more
appropriate mode of tendering would be single stage selection tendering. In
Single stage selective tendering, the developer restricts the number of tenderers
to just a few from a specific shortlist that would identify certain attributes
which are essential to the project’s scope, timelessness and quality. This
method of tendering improves the quality of offers from prospective tenderers which
would ensure competence and achieve the requirements set in the design of the
project. In such cases, it may be established that all offers are compliant
with regards to skill, technical expertise, financial stability and necessary
experience and thus the award of the contract may be solely dependent on the
most economically advantageous offer. Such a tendering process would also
reduce the cost of tendering for the developer since there would be less
documentation to process and thus less use of resources and shorter tendering
Furthermore, the developer may opt for a
two stage selective tendering. In which at first stage, a contractor is
involved at an early stage of design so as the developer may benefit from the
contractors expertise and advise and thus increasing cost savings and aid buildibility.
This mode of tendering is usually used in very complex projects and may lead to
complaints from prospective tenderers at the second stage.